Saturday, November 28, 2009

At breakfast this morning, I was regaling Mrs. Angus with my theory that Tiger Woods' injuries were not from the car wreck, but rather from Mrs. Woods, and that she didn't bust Tiger's whip with his driver to get him out of the car post wreck, but rather was simply wailing away on the car as el Tigre tried to escape her fury.

So, Tiger Woods has been hurt, moderately badly, after hitting a fire hydrant after pulling out of his driveway in ....Windermere, FL!

I did not know that he had a home in Windermere. Or, as John Jarosz always called it, "Windermar, home of the Wombats."

Anyway, I'm sorry that this happened.

But ....Windermere? My home town, basically. (I grew up in nearby Gotha, home of the mighty Gophers).

Some interesting things (interesting to me, anyway).

1. Tiger lives in Isleworth. Now, Isleworth is a very nice place, one of the most exclusive areas in central FLA. But when I was growing up, Isleworth was literally a ghetto, a walled enclosure where the black people, or "pickers" (they picked oranges) lived. It was VERY poor, and the segregated school system was horrible for African-Americans. Amazing that a black man, one of the richest in all of U.S. sports, lives in Isleworth. I cringe when I hear that.

2. He hit a fire hydrant. In fact, the story says, "Woods, had pulled out of his driveway in a Cadillac SUV....As he began to drive .... (Woods) struck a fire hydrant," FHP reported. The front of Wood's vehicle "then struck a tree" located at a neighboring property." Now, in a nice place like Isleworth, they don't put the fire hydrant in the middle of the street. They don't even do that in Gotha, fercrissakes. So, I'm guessing that texting was involved, here.

3. Apparently, they took the injured Tiger to.... Health Central Hospital in Ocoee. Really? My high school chum, and wedding groomsman, Dr. John C. Cappleman, is an internal med specialist, and longtime surgeon, at Health Central. I wonder if he will see Tiger?

Anyway, I do hope that Tiger is okay, and that the facial lacerations are not deep, or in his eyes. But...Isleworth? Really? We used to ride bikes there, but the little black kids would throw rocks at us, and in retrospect I don't blame them.

UPDATE: I have seen, in two places now, that "charges are pending." Texting, for sure. Ugh.

UPDATE II (Friday 10 pm): Yes, "texting" is a eupemism for being drunk. Apparently Tiger's wife used a golf club to break him out of the car. Still, isn't it strange that he pulled out of his driveway, and smashed his car after driving 100 yards? Domestic dispute? No, I don't know why I am so interested that I am just making stuff up.

UPDATE III (Saturday 8 am): The LMM's take: (a) She should have left him in the car. Elin apparently broke in through the back and dragged Tiger out. Neck/spinal injuries, even minor ones, mean that dragging Tiger out all the way from front to back...nuts. (b) Sounds a lot like Elin and Tiger had a fight. She reminds him of something. He gets mad. She gets madder. He says something that crosses a line. She gets REALLY mad. He slams door, gets in car, squeals out of driveway to show how mad he is, and loses control and smashes into fire hydrant/tree. This does sound plausible, since otherwise it is hard to see how he could be going fast enough to hurt himself. On the other hand, it appears that he wasn' going very fast, because the airbag did NOT deply. Then why did he get hurt? Did she hit him with the golf club?

Fresh cranberry sauce: In a food processor, chop fresh washed cranberries and dried apricots until still just a little lumpy (should be some crunch left in cranberries, not a paste). Add 2 cups water. Cook on low heat, just until it boils. Add on Jello package, lemon flavor. Let sit in fridge for two days.

Dressing: Use any kind of bread crumbs. If seasoned, leave out seasoning. If not, add sage, salt, and thyme. Maybe some chopped parsley. Put just enough water to moisten. In skillet brown sweet italian sausage (ground, not links), then add onions and celery. When it's done (onions are still a fraction crisp) add a bag of dried cran-raisins. Combine all ingredients and stir. Add more water if you need to.Let sit in fridge overnight, to let everything get to know each other.

Wednesday, November 25, 2009

One objection often made to studies showing that the fiscal multiplier may be quite small is that the studies do not explicitly take into account the direness of the current economic situation. Now a new NBER working paper (early ungated version here) by Almunia, Bénétrix, Eichengreen, O'Rourke, and Rua attempts to do exactly that.

It is titled From Great Depression to Great Credit Crisis: Similarities, Differences and Lessons.

Here is the abstract:

The Great Depression of the 1930s and the Great Credit Crisis of the 2000s had similar causes but elicited strikingly different policy responses. It may still be too early to assess the effectiveness of current policy responses, but it is possible to analyze monetary and fiscal policies in the 1930s as a “natural experiment” or “counterfactual” capable of shedding light on the impact of recent policies. We employ vector autoregressions, instrumental variables, and qualitative evidence for a panel of 27 countries in the period 1925-1939. The results suggest that monetary and fiscal stimulus was effective – that where it did not make a difference it was not tried. The results also shed light on the debate over fiscal multipliers in episodes of financial crisis. They are consistent with multipliers at the higher end of those estimated in the recent literature, consistent with the idea that the impact of fiscal stimulus will be greater when banking systems are dysfunctional and monetary policy is constrained by the zero bound.

This is potentially an important and fascinating finding. I am going to read this piece carefully over the holiday.

(1) Guys, when you leave your young son in your truck to go drinking at a strip club, it's not a good idea to forget where you parked when you leave the club at 1:00 in the morning! And if you do, calling the cops to report it stolen is not the recommended move.

INDIANAPOLIS – A man was arrested after police said he left his 5-year-old son in a tractor-trailer while he ducked into an Indianapolis strip club to drink. The 39-year-old was arrested at 1:15 a.m. Tuesday on child neglect and public intoxication charges after calling police to report his truck stolen and his child missing. Police said the man was too drunk to remember where he had parked.

They found the boy inside watching cartoons on a television inside the cab. The keys were in the ignition, and the doors were unlocked.

Police said the suspect put his son in jeopardy by leaving him exposed in a high crime area.

The man was taken to the Marion County jail, where his wife picked up him and the child.

Oh, that reminds me:

(2) Ladies, when your husband leaves your kid stashed in his truck while he hits the strip club and then calls you in the middle of the night to come get them at the police station, it is A-OK to only pick up the kid and leave the husband in the hoosegow!

One of the reasons I am pretty hard on late people now is that I was a notorious late-ster. (And I still sometimes miss meetings completely, because I forget them....)

My objection is the people who are ALWAYS late, but make excuses. (And I object because that used to be me). There is one guy in my department (his initials are Herbert Kitschelt) who is ALWAYS ten minutes late for faculty meetings. But Herbert never apologizes. He hates the chit-chat, late starting, time-wasting patter of the first ten minutes of faculty meetings. He is just straight up intentionally late.

No objections, no complaints from me. If you are late on purpose, and admit it, I actually find that perfectly admirable. But don't give me lame excuses.

Further, I should point out that Herbert is always precisely on time, and is in fact two minutes EARLY for small meetings where being late would actually hold other people up. It's just the big meetings, the stupid meetings, that he is late for.

A quick look at Summers suggests diving for drop shots isn’t really his game, though opponents say he’s deceptively agile. The typical Summers point will start with a cannon-like serve. If the return is weak, the bulky six-footer will cut the ball off and swing for a difficult angle. Each additional shot is more likely than the last to either be out or un-returnable--the shorter the rally the better. As a player, "Larry is very tenacious … like his personality," says Summers’s sometime coach, Nick Bollettieri. "I don’t think Larry ever smiles." (Adds Bollettieri: "I told Larry if he has enough money, I can still get him to another level.")

Yes that's THE NicK Bollettieri, erstwhile coach of Andre Agassi and tons of other pros. What's he doing in the story? Well:

Not long after leaving office in 2001, Summers and a Treasury colleague named Lee Sachs spent a long weekend refining their strokes at Bollettieri’s world-famous tennis academy in Florida. "He and I were making the adjustments to post-government life," Summers recalls. "His father lived down there, and we decided to try it for several days."

The trip soon became an annual ritual, with Geithner, Sperling, and several other former colleagues joining in. Each March, the wonks-in-exile would present themselves to the Bollettieri instructors for two days of extensive drilling.

Ah Hugo Chavez, the gift that just keeps giving. Now he's in the news for his sympathetic take on Carlos the Jackal, Robert Mugabe, and Idi Amin:

"They accuse him of being a terrorist, but Carlos really was a revolutionary fighter," Chávez said during a televised speech on Friday.

Chávez defended other leaders he said were wrongly branded "bad guys", including Mugabe and Ahmadinejad, a close ally who is due to visit Caracas this week during a South America tour.

He also said that Amin, whose regime is accused of killing 300,000 Ugandans in the 70s, may not have been so bad. "We thought he was a cannibal. I have doubts. I don't know, maybe he was a great nationalist, a patriot."

Thanks as always to Tyler for bringing this "scandal" to my attention. I am using quotes here because, in my opinion, this is just business as usual in academics. There may not be such a blatant electronic "paper trail" on display, but protecting turf, punishing heretics, and rewarding your friends is the coin of the realm.

Take macroeconomics for example. Who is the premier employer of monetary economists? Yes, it is the Federal Reserve System. Who as a class of researchers really deeply loves them some Fed? Yes, it is monetary economists. Fed independence is taken as a given an as a desideratum. Heretics (sour grapes warning: I am a Fed heretic) find it extremely difficult to publish dissenting views.

I have a piece in the JME on political influence on the Fed. Pretty good publication for me, but the paper took 7 years to find a home and the results in it were unchanged from the first version (which was from my dissertation).

I would go so far as to say that every scientific "consensus" based on empirical evidence is far weaker that it is made to appear via mechanisms like those described in the Climategate story.

I went to see Michael Moore's "Capitalism: A Love Affair" a few weeks ago, working for WPTF radio. And, I actually thought it was pretty good. Funny. And the middle part was excellent, really first rate. MMoore smashed four people who needed smashing. Those four? L. Summers, T. Geithner, B. Frank, and C. Dodd. Two economists, a narcissistic goofball, and an unprincipled drunk, in that order.

Dr. DeLong is fussing and moaning that a few people have finally come to their senses, and (as he puts it) "dug in their heels" on the enormous deficit. As it stands, folks, combining the state and federal government deficits for the next two years, what we already KNOW about, each working person in the U.S. owes well over $100,000, mostly to the Japanese and Chinese, who have bought our bonds, our debt, our Treasury bills.

(Editor note: "working person" means people with jobs. There are only about 150 million working people in the US. The projected debt of the feds is about $70k / worker, and the states is about $30k / worker)

But Dr. DeLong thinks that is not enough! He is clearly disdainful of those of us who are worried about selling our country, about mortgaging the birthright of our children. He says that if we have one more, just one more, bad economic downturn we may now have a return of the Great Depression. DeLong puts the probability at 5%. What he wants to do is to spend our way out of the recession, but he is not sure we can, because our deficit is so big.

Amazingly, Dr. DeLong cites a discredited theory, a theory no real economists believe anymore. Again, I can scarcely believe this, but DeLong bases his argument on the so-called "Phillips Curve," the theory that unemployment can be driven down by increased inflation.

Folks, this theory has been debunked, and debunked, and discredited, yet policy makers still want to use it. I can cite you a whole fistful of Nobel Prize-winning economists who have proved, absolutely proved, that announcing you are going to use inflation as a policy NEVER reduces unemployment.

So, Dr. DeLong gets an F: back to school, sir!

On the other hand, and I can't believe I'm saying this, either: Michael Moore, in his new movie, gets the cause of the crisis, and the damage of the bailout, about 75% correct. A solid C, for Mr. Moore, a gentleman's C.

Who is to blame? It is clear in the movie, if you watch "Capitalism: A Love Story." The cause of the financial crisis, Mr. Moore is very clear, the men at the center of the financial crisis are....the guys who are now the Obama economic team, and the people in Congress who want to blame everyone but themselves.

Michael Moore lines them all up, and skewers them: Tim Geithner, now head of Treasury. Larry Summers, now Director of Obama's National Economic Council . And, this is the best part, he also goes after people in Congress. Chris Dodd, the Senator from , and Barney Frank, the guy who forced our banks to make all those bad loans to people who couldn't pay them back! Barney Frank, the guy who knocks down old ladies if they get between him and a microphone, and who wants to blame Wall Street....Michael Moore shows how Barney Frank helped cause the crisis! It's delicious.

The point is that the only thing we have to fear is, Porkulus itself! DeLong wants us to spend more, to increase the deficit. But we can't do that. Because, as none other than Michael Moore himself showed, all that TARP money, all that Porkulus money, was wasted, thrown away, poured down a rathole.

DeLong is right about one thing: if we have another crisis, we will really be in trouble. Because we won't be able to bail out Wall Street again. But the reason is that we already spent too much on a useless bunch of policies. We spent like drunken sailors on shore leave. I'm sorry, I take that back, it's an insult to drunken sailors.

The bottom line is unbelievable! Michael Moore gets it right, at least for about ten minutes of his otherwise terrible movie. And Dr. Brad DeLong, a Berkeley economist, gets it wrong. The Phillips Curve is dead. Let it rest in piece, Dr. DeLong.

When he referred to this post by Krugman as one out of "two of the best recent economics blog posts, in some time." In fairness, Tyler did do some basic CYA by noting in parentheses that he wasn't sure if he agreed with the post.

So lets break it down, KPC style:

"From various bat squeaks I’ve put together a view of what I think lies behind the surprising — and damaging — deficit squeamishness of the Obama administration."

Ok, so we start off with a double WTF. Bat squeaks? Is he making fun of Larry Summer's speaking voice?

And what is this about the "deficit squeamishness" of Team Obama?

People, the fiscal 2009 deficit was $1.4 trillion! And thats not just a one time, caused by the recession, deal. According to the CBO, the deficit in 2019 will also be over $1 trillion. Plus Team Obama seems willing to sign on to a health care reform bill that will in all probability further raise the deficit beyond current projections.

I am sorry Paul, but I just don't see any reluctance of the Obama administration to run big deficits.

Krugman then claims, without any supporting evidence, that the main reason why we are running such tiny, puny, pusillanimous deficits is that the government believes that further borrowing could cause long term interest rates to skyrocket because it would unwind a sort of carry trade going on where people are borrowing at ultra low short term rates and lending out at higher long term rates. As he puts it:

"Well, what I hear is that officials don’t trust the demand for long-term government debt, because they see it as driven by a “carry trade”: financial players borrowing cheap money short-term, and using it to buy long-term bonds. They fear that the whole thing could evaporate if long-term rates start to rise, imposing capital losses on the people doing the carry trade; this could, they believe, drive rates way up, even though this possibility doesn’t seem to be priced in by the market."

PK thinks this is a dumb argument. So do I. However, I don't happen to think it is why our deficits are what they are (which to PK is small, but on planet earth where I live, it is fairly large).

People, if Team Obama really wants to run a bigger deficit in theory (which we have no real evidence that they do), but are not doing so in practice, the reason why is much more likely to be that they fear the political fallout from all of us irrational people who would object to such a policy.

I actually agree with Krugman that the government could borrow a lot more money without any directly adverse macro consequences in the short to medium term.

I just didn't see anything in the way the original stimulus bill was constructed and implemented that would make me believe that another round of stimulus from the same set of players would do much for job creation or help put our economy on a sustainable recovery path.